New Delhi: State-run GAIL India Ltd will buy gas from Oil and Natural Gas Corp’s (ONGC’s) new field to come on production in Mumbai offshore from next month at $5.5 per million British thermal unit.
“We will buy gas from ONGC’s C-series field from 1 August,” GAIL director (marketing) B C Tripathi said here.
The field would begin with 0.8 million standard cubic metres per day output that would rise to 2.8 mmscmd in a years time, he said.
Incidentally, Tripathi will also take over as the chairman and managing director of the state gas utility on 1 August. He will succeed U D Choubey who retires on 31 July.
Tripathi said GAIL would buy gas from C-series at $5.5 per mmBtu, 30% more than the price at which Reliance Industries sell gas from the nation’s biggest gas field in Krishna Godavari basin off the east coast.
Reliance gets $4.215 per mmBtu for the gas it produces from KG-D6 fields off the Andhra coast. The price is fixed for the first five years of production. KG-D6 gas production began on 2 April and is slated to rise to 80 mmscmd by year-end, nearly doubling the nation’s gas output.
Tripathi said according to the production profile given by ONGC, the peak output of 2.8 mmscmd from C-series will last 5-6 years.
The price for C-series fields is similar to what GAIL pays for gas from the western offshore Panna/Mukta and Tapti or PMT, fields that are jointly owned by British Gas, Reliance and ONGC. GAIL pays $5.7 per mmBtu for PMT gas, compared with $4.3 per mmBtu for Cairn India-operated Ravva field off the east coast.
None of the prices include transmission charges, marketing margins or local levies on gas sales.
ONGC sells a large chunk of its gas at the government controlled price of about $1.8 per mmBtu.
The oil major has invested Rs3,195 crore to develop the C-series marginal field that is estimated to hold in-place reserves of 15.54 billion cubic metres of gas and 4.46 million cubic metres of condensate.
The C-series field, was discovered in 1990s and is about 60 km west of Daman in the Tapti-Daman block offshore Mumbai at water depths ranging from 19 meters to 35 meters, but considered marginal until crude crossed the $100 a barrel mark last year.